SustainAbility – IT Recruitment Market Update – August 2021

As we roll into the second half of 2021, it’s crystal clear that we’re going to be wrestling COVID for a long while yet. It’s interesting to see how the Australian job market has responded to the pandemic.
 Seek ADs

 

So the job market took a big hit when COVID first arrived, but it rebounded quite quickly, and in spite of the recent lockdowns, it remains at a very high level (still some 25% higher than they were pre-pandemic). Unemployment, perhaps unsurprisingly, is at historically low levels.

Focusing in on the IT sector, it has perhaps been one of the strongest performers over that period. With employees & customers in lockdowns, everyone is more reliant than ever on their IT platforms, eCommerce systems, and the ability to call people on Zoom. The upshot is companies rather than pull back on IT during the pandemic, have actually had to invest more in technology to ensure they were still able to function effectively.

Indeed the last 12 months have proven something of a boon for the IT market. The IT sector of the ASX has experienced some 36% growth over the last 12 months (versus 23% for the ASX200). The general health of both the economy and the stock market has also meant there’s been more venture capital available for startups & scaleups. KPMG had indicated 2020 had already been a record year for VC funding, and with the share market still going gangbusters, there’s no shortage of capital to invest.

This is also happening at a time when skilled immigration has essentially stopped. Pre-pandemic around 2000 skilled immigrants per week were arriving in Australia. Now, this pool of candidates has totally dried up. Even if your business wasn’t tapping into the pool of recent arrivals, they added an important layer of fluidity to the market.

It’s also been something of a time when local candidates have become that bit more risk adverse. When the nightly news is full of tales of problems with the vaccine rollout, the delta variant, lockdowns, etc it’s perhaps unsurprising that many IT professionals have temporarily parked their concerns about their career trajectory and thoughts of moving jobs.

 

The upshot is it has been something of a perfect storm for IT recruitment. Record appetite to hire, record low levels of candidate availability.

Quality candidates that are open to a move have most certainly picked up on the new state of the IT recruitment market, and have adjusted their expectations accordingly. No longer are you able to recruit quality people for the salary you used to successfully recruit quality people for in 2019 or 2020. It’s hard to quantify by exactly how much the market has moved in the last few months, but here at SustainAbility we’d suggest the increase is in the order of 15%.

Often managers are concerned with issues of parity across their team: “We can’t afford to pay the new person $x+15% when the rest of the team are on $x”. We certainly understand that can be a challenging issue to manage. The alternative though is to leave a hole in your team long-term. And perhaps this should be seen as a sign that you should be reviewing the salaries of your remaining team members. That one person hole in your team could become a gaping chasm if a few more people in your team find an appetite to look at other job opportunities and they’re all still on $x.

It’s not though simply about money alone though. Your tech stack also matters. It’s nigh on impossible to find quality IT people to work on mediocre tech in the current climate. Look for opportunities to integrate the latest tools into your environment.

Equally important are your business practices. Candidates now expect the flexibility to work from home. Not just during the pandemic lockdowns, but beyond it. Work from home seems to have worked very well for the IT sector, and candidates are hardly in a rush to resume wasting 90 minutes+ commuting on a daily basis. People though appreciate there is value in getting people together face to face, but no more than 1, maybe 2 days per week maximum.

It’s also much less upheaval to change jobs, as the geography card has largely been eliminated from the deck. What might be a flatly unmanageable commute, can become entirely reasonable if it only needs to be tackled one day a week (and that’s something to be dealt with only once we actually get out of lockdown). Even interviewing has become easier. In a 2021 COVID world where all interviews are done via Zoom, it’s so much easier for candidates to “attend” interviews. As a consequence decisions are being made fast. You need to be nimble and fast to act.

That might make recruitment all sound very hard. Good. It’s bloody hard at the moment, and you need to be aware of that before you start. Some of the older heads here at Sustainability have been in the IT recruitment game in Sydney for 20+ years, and we think it’s the toughest market conditions we’ve ever seen.

The great news is that our specialised niche recruiters are in regular contact with the best talent in the market, so we are still able to find you great candidates, provided you are approaching the market with a wholistic offering: a competitive salary, plenty of WFH flexibility, plus you’re committed to being agile around interviewing and are ready to move quickly.